Add New York City to the list of roadblocks that ride service Lyft must deal with as it expands nationally.
New York City’s attorney general and the Taxi and Limousine Commission filed a restraining order on Lyft, which lets users order rides around town after scheduling a pick-up via a smartphone app. The move comes on the same day Lyft planned to start operations in two New York City outer boroughs, Brooklyn and Queens.
A report by The Verge claims Lyft met with city officials, who are deliberating over whether the startup’s business adheres to local transit laws. Officials took legal action after Lyft announced it would move ahead with its New York City launch, regardless. Now, Lyft intends to delay its New York City launch until both sides can iron things out. (A number of cities have tried to stop Lyft over licensing and legal issues. Taxi drivers, which stand to lose clients to Lyft, have been particularly vocal in their opposition.)
“We agreed in New York State Supreme Court to put off the launch of Lyft’s peer-to-peer model in New York City, and we will not proceed with this model unless it complies with New York City Taxi and Limousine regulations,” Lyft spokesperson Erin Simpson told Fortune in a statement. According to Simpson, Lyft and the Taxi and Limousine Commission will begin discussions on Monday on ways for the startup to comply with local transit laws. Once the two sides come to some sort of agreement, Simpson said Lyft plans to launch in New York City “immediately.”
Lyft’s expansion efforts in recent months have been nothing short of aggressive. This April, the startup nearly doubled the number of U.S. markets it serves moving into cities like Kansas City, Mo., Omaha, Neb., and Corpus Christi, Texas, bringing the total tally to 60. The company also announced a temporary 10% price cut on fares in all markets, following a 20% cut it had already announced. That same month, Lyft raised a whopping $250 million from backers such as Alibaba, Third Point, and Andreessen Horowitz – a sum that will go towards international growth.
Note: This post was updated with additional information.